N.J. Plans Sharp Cuts to Most School Districts

New Jersey school districts learned Wednesday that most districts can expect to lose even more in state aid than they previously were told.

New Jersey School Boards Association spokesman Frank Belluscio said that means districts could be forced to choose in the next few weeks between proposing deep cuts or asking voters to approve big property tax increases in a state where property taxes are already the highest in the nation.

But Education Commissioner Bret Schundler said that if lawmakers quickly approve a public employee pension bill, the impact could be mitigated — and any layoffs may be able to be reversed by the time schools open next fall.

The Education Department on Wednesday announced how it plans to distribute $8 billion to school districts, about a $1 billion decrease or 11 percent less than last year.

Going back to the administration of former Gov. Jon Corzine, who was replaced in January by Chris Christie, education officials had been telling school administrators to prepare for cuts of up to 15 percent.

While the overall reduction is less than that, it is higher for the majority of the state's 580 districts because the state decided to reduce aid so that most districts would lose about 5 percent of their total current budget.

The smaller wealthy districts would lose all their "formula aid" because the state funds under 5 percent of their total costs. However, they will still get assistance with paying for debt service on construction projects and for special costs for high-needs special education students, among other items.

Belluscio said the deeper-than-expected cuts will force many districts to rethink their budget into their planning process. In most districts, voters will be asked to approve district tax levies on April 20.

Generally, schools are not allowed to ask voters to approve tax hikes of more than 4 percent without state approval. But they can replace lost state aid — meaning districts could propose bigger tax increases. But the higher they go, the more likely they are to be rejected — especially in a recession that has taxpayers stressed.

Schundler said the real problem isn't that the state guidance turned out to be off.

"The issue is it's a difficult thing to do when you're state and federal aid is down when your insurance premiums are up 26 percent and your labor is up 5 percent," he said on a conference call Wednesday.

Schundler said lawmakers could help the situation by quickly passing a bill that would require school employees to contribute to their health insurance costs. That would save districts money, he said. It would encourage employees close to retirement to retire now so they could retain free lifetime benefits, he said.

If such a law could be adopted in time to take effect by Aug. 1, he said most — and maybe all — laid off workers could be recalled.

Associated Press Writer Geoff Mulvihill wrote this report.

Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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